'Permanent' Transfer Tax Relief At Last

For the first time in more than a decade, Congress has enacted a permanent set of estate, gift and generation-skipping transfer tax rules. While Congress can always change the law, there is no automatic "sunset" or change built into the current law. 

In a nutshell, the new transfer tax law provides: 

• $5 million exemption for gift, estate and generation-skipping tax, adjusted for inflation after 2011. The 2013 exemption amount is $5,250,000.
• Exemption is applied both to lifetime gifts and to transfers at death, and also applies for generation-skipping transfers.
• Marginal tax rate on transfers above the exemption amount is 40%.
• Portability is made permanent. This allows a surviving spouse to use the "unused" gift and estate tax exemption (but not generation-skipping tax exemption) of the first spouse to die for the survivor's lifetime gifts and transfers at death, with certain restrictions.